howardnlby Howard Stephenson
Mayor Rocky Anderson and Mayor Nancy Workman each demonstrated great leadership last week when, against intensive lobbying by various powerful and vocal groups, they took stands against costly new ventures of their respective local entities.

Mayor Anderson’s decision was especially statesmanlike since his recent decision contradicted his previous position which he had vigorously advocated in his State of the City address. It is atypical for a politician to do a one-eighty on a previous position. But Anderson could not ignore the facts and, fortunately for those he represents, had the courage to reverse himself.

There is no end of good things city and county governments can do for us if the funding is available. However, in a state whose taxes rank 9th highest in the nation, one question which begs an answer is, how many more good government projects can taxpayers afford? Perhaps an even more important question is, should government begin to provide services which are already available through the private sector?

Anderson Opposes UTOPIA

Mayor Anderson last week announced his opposition Salt Lake City’s participation in UTOPIA, a consortium of 18 cities which plans to spend $540 million for a fiber-optic system to provide high-speed Internet, television and telephone services to subscribers within their cities. The most ambitious fiber-optic network in the hemisphere, UTOPIA supporters initially claimed the project could be built without taxpayer backing. Now, organizers say taxpayers in each of the cities need to guarantee 39% of the entity’s debt in order to get affordable funding of the project. Without taxpayer funding Wall Street insists on a 12% interest rate to fund the venture, which is best described as junk bond status. If the project goes belly-up, taxpayers in the eighteen cities could be on the hook for $19 million per year for 17 years.

Of the original 18 cities, those whose city councils have formally volunteered their taxpayers’ participation in the risky venture include Brigham City, Centerville, Layton, Lindon, Midvale, Murray, Orem, Perry, Tremonton and West Valley City. Murray narrowly approved participation in UTOPIA with the deciding vote cast by Councilman Jeff Dredge who happens to be UTOPIA’s well-paid CPA and owner of office space rented to UTOPIA.

In an email memorandum to the city council Mayor Anderson outlined nine reasons for the city to decline participation in UTOPIA. He observed that much of Salt Lake City already the services offered by UTOPIA including an abundance of fiber-optic lines available to businesses. “There is no reason to think this is the right time for Salt Lake City to undertake a project like UTOPIA . . . You’ve had some very talented people lose billions of dollars in the telecommunications industry the past few years, and I’m not sure taxpayer money should be put at risk,” he said.

The City Council is expected to vote on the proposal on April 13. Hopefully they will heed Mayor Anderson’s counsel.

Workman Opposes Theater Tax

Mayor Workman took the side of taxpayers once again last week when she called a press conference in front of the old Utah Theater on Main Street to announce her opposition to taxpayer funding of the theater’s renovation.

“Someone else should foot the bill for the theater, not taxpayers, Workman said. “Our tax dollars are too precious for this project. Taxpayers deserve a break.”

During her 3 ½ year tenure under the new council/mayor form of county government the mayor has refused to raise taxes, despite pressures brought on by other county officials and a stagnant economy. She received the Utah Taxpayers Association’s “Taxpayer Advocate” recognition two years ago for holding the line on county taxes.

Officials in both Salt Lake City and Salt Lake County have been promoting the idea of investing public money in a $45 million renovation of Main Street’s old 1919 Pantages Theatre which was later renamed Utah Theatre. County Council member Randy Horiuchi and Salt Lake City Council member Jill Remington Love have expressed support for the idea. There has been talk of Salt Lake City’s Redevelopment Agency (RDA) providing some of the funding.

Promoters of the renovation described it as an economic development boon to the city and county. In an Enterprise column a few weeks ago, I challenged the notion that theater renovation is economic development, stating that while there are many cultural benefits to having a downtown theater larger than existing venues, this proposal is clearly not economic development.

Economic development occurs when businesses and individuals increase productivity or when individuals and businesses are able to attract money from out of state. Fortunately, Mayor Workman realizes that the renovation of this theater will not by any stretch create wealth or draw significant funds from out of state.

There is at least one other huge downside to raising taxes to open a new downtown theater. Councilman Horiuchi wants to fund the project through countywide bonded indebtedness, which would cause existing businesses and individuals to pay higher taxes. Businesses would then have less money to invest in capital equipment and expansion which would reduce businesses’ ability to increase productivity and sell more products.

As I noted in the earlier column, the proposal to use Redevelopment Agency subsidies to support the renovation is just one more way for city councils to take property tax dollars from school budgets and give them to subsidize arts patrons. Salt Lake County already imposes the Zoo, Arts & Parks (ZAP) sales tax to fund these activities. Why should property taxpayers face a front door tax increase for the bond and also a back door tax hike through the RDA?

If they are serious about economic development, policymakers can ensure creation of more high wage jobs by letting high wage companies keep and invest more of their own money.

Hats off to Mayor Workman who has shown her allegiance to taxpayers once again. Hopefully, the county council will follow suit.